(Bloomberg) -- Futures contracts on India's Nifty 50 Index dropped in Singapore after economic growth in Asia's third-biggest economy lagged estimates and slumped to its slowest pace in six years on Friday.
SGX Nifty 50 Index futures for September delivery dropped as much as 1.1% to 10,936 as of 1:11 p.m. in Singapore, indicating the broader stock market may extend declines when they open for trade on Tuesday after a local holiday. Indian stocks on Friday capped a drop for August and their longest stretch of monthly losses since 2016.
Gross domestic product growth cooled for a fifth straight quarter to 5% in the three months ended June. That was the slowest pace since March 2013 and well below the median estimate of 5.7% in a Bloomberg survey of economists.
Investor confidence remains fragile and India's key stock gauges are down more than 7% from their peak in June even after government measures in the past week that included reversing a tax on foreign funds and encouraging bank lending.
To be sure, Prime Minister Narendra Modi's move to announce the merger of several state run banks may shift focus from the slump in economic growth, according to some analysts.
Economists have cut their forecasts for the nation's economic growth and predicted deeper interest-rate cuts after data showed a sharper-than-expected slump in output.
To contact the reporter on this story: Abhishek Vishnoi in Singapore at avishnoi4@bloomberg.net
To contact the editors responsible for this story: Lianting Tu at ltu4@bloomberg.net, Naoto Hosoda, Kurt Schussler
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